Ujjivan reviewed the existing credit policy and processes based on the experience of the last three years and the current issues faced, with increased competition. The objective of this exercise is to be a responsible lender in a changed environment.
Consequently, Ujjivan decided to roll out a new credit policy, in an effort to maintain customer quality while being aligned with Ujjivan’s mission of serving the economically active poor. The policy has been designed to ensure strict adherence to credit guidelines and to reduce the turnaround time for processing loan applications.
The credit procedures have been streamlined by empowering the field staff to assess the creditworthiness of customers as they are the eyes and ears of Ujjivan and are more aware of the ground realities.
The process of customer induction has been strengthened such that only those customers who are in Ujjivan’s target group are inducted and others are screened out at the customer selection stage itself.
The loan approval process both in the first loan and repeat loan cycles has been revised and several qualitative checks have been included in the credit assessment process. Multiple lending and overextension of credit has become an area of concern and several techniques to avoid over lending to our customers have been incorporated.
Finally the collection process has been made more methodical to allow for more efficient delinquency management. The MIS reports have been standardized across all branches to ensure uniformity in branch data collection.
The first batch of credit training was successfully completed for the Distribution Managers across regions. The session was interactive and the participants gained from learning about the challenges and practices followed in the different regions. After 2 grilling days, the training ended on a relaxed note with the MD taking the entire team out for dinner.
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